Correlation Between Singapore Telecommunicatio and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio and Pembina Pipeline at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Singapore Telecommunicatio and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications Limited and Pembina Pipeline Corp, you can compare the effects of market volatilities on Singapore Telecommunicatio and Pembina Pipeline and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Singapore Telecommunicatio with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Pembina Pipeline.
Diversification Opportunities for Singapore Telecommunicatio and Pembina Pipeline
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Pembina is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp and Singapore Telecommunicatio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Singapore Telecommunications Limited are associated (or correlated) with Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Pembina Pipeline
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 1.03 times less return on investment than Pembina Pipeline. In addition to that, Singapore Telecommunicatio is 1.19 times more volatile than Pembina Pipeline Corp. It trades about 0.02 of its total potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.03 per unit of volatility. If you would invest 3,860 in Pembina Pipeline Corp on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Pembina Pipeline Corp or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Pembina Pipeline Corp |
Singapore Telecommunicatio and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Pembina Pipeline
The main advantage of trading using opposite Singapore Telecommunicatio and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio position performs unexpectedly, Pembina Pipeline can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| Singapore Telecommunicatio vs. Monster Beverage Corp | Singapore Telecommunicatio vs. United Breweries Co | Singapore Telecommunicatio vs. ARISTOCRAT LEISURE | Singapore Telecommunicatio vs. ePlay Digital |
| Pembina Pipeline vs. Superior Plus Corp | Pembina Pipeline vs. NMI Holdings | Pembina Pipeline vs. Origin Agritech | Pembina Pipeline vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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